In the Federal Budget 2021, the Government committed $1.2 billion to its Digital Economy Strategy. Its goal is to improve Australia’s competitiveness, boost productivity, create jobs, lift wages, and to become a leading digital economy by 2030.
Prime Minister Scott Morrison said, “We must keep our foot on the digital accelerator to secure our economic recovery from Covid-19.” Companies are heeding the call. In workplaces up and down the country, digital transformation is underway.
Business leaders increasingly understand that it is a necessity to remaining relevant and competitive in changing (and challenging) times. Maintaining manual processes when technology can do routine work better and cheaper than an employee limits current and future profitability.
How to automate?
However, the issue of how to automate business processes is problematic in many organisations. This is because there may be little knowledge of them from an end-to-end perspective, with employees simply doing what needs to be done to keep things running on a day-to-day basis. Some studies show 75% of employees don’t fully understand their current business processes.
This may especially be the case for large organisations that have grown and acquired entities over the years, evolving more complex structures. Often these ‘new’ business units continue to operate separately, not fully integrated into company systems and processes. As a result, there may be inefficient workarounds in place to accommodate legacy practices.
Manual interventions may be expensive and inefficient but typically ensure everything works as it needs to. Automation presents business risk; there is the chance of unknown, interconnected processes falling over. As a result, the status quo may endure, inevitably holding a company back. According to McKinsey & Company, around 68% of enterprise business processes remain highly manual.
Automating business activities requires work: mapping processes, re-designing and optimising workflows, attributing roles and responsibilities, and deciding the business rules for an automation solution to follow. This means a significant investment for the business either in management time and effort or through engaging external consultants. This work needs to be done properly for automation to realise its potential.
Automating a bad process
Any shortcuts in this scoping work could lead to your company automating a bad process. For example, it may be relatively quick and easy to deploy Robotic Process Automation (RPA) bots to carry out routine work. While you would enjoy some immediate cost savings, automating a bad process remains inefficient and unnecessarily expensive over the long term. In the worst case, it could lead to a faster generation of errors and greater volumes of them for staff to rectify.
In other circumstances, there may simply be more effective ways of doing things that you may not have considered. Therefore, it is worth engaging a vendor with specific expertise in the area you’re looking to automate. For example, invoices are typically received by a business over email and as PDF attachments. However, email is not necessarily a good process:
Firstly, data needs to be extracted from file attachments and uploaded into company systems for processing, which creates the potential for manual data entry errors to throw out payment times and processing costs. Secondly, email is an insecure channel that is vulnerable to hackers. Business email compromise scams cost Australian businesses $142 million in the 2019-20 financial year alone.
Optical Character Recognition (OCR) technology can automate the data capture process, extracting invoice information from email attachments and feeding it to an automated business rules engine to trigger approval workflows. However, it is not the most efficient way of achieving straight-through processing because some validation work is still required by accounts payable.
Instead, a more efficient way to receive invoices is via the PEPPOL network rather than an email channel. PEPPOL is the system-to-system exchange of invoice and other procurement documentation over a secure, encrypted communications network. Specialist accounts payable software vendors should be able to advise on this, offering access to the network through their solution, as well as providing the most sophisticated OCR technology on the market to automate the data capture of emailed invoices.
Read more: FAQs on PEPPOL e-Invoicing
Meeting current & future needs
The right vendor will be able to meet current needs while anticipating future ones. They should have extensive experience in automating the specific function you require, so they can advise on best practice as well as any potential pitfalls to be aware of.
Working with a specialist software vendor helps to limit any risk inherent in automating business processes. An accounts payable solution provider, for example, will lead the scope and requirements work for the client, ensuring business processes are mapped and then optimised to achieve game-changing efficiency gains through automation.
It’s worth looking for a vendor with a strong track record of successful implementations and that wants to partner with you over the long term. An accounts payable automation solution, for example, may be able to provide a digital on-ramp for further business process optimisation initiatives across procurement, vendor onboarding, statement reconciliation, accounts receivable, Capex, expense claims and more.
With accounts payable automation providing a high return on investment very quickly, it’s often an organisation’s first digital transformation initiative. This makes engaging the right partner and achieving tangible efficiency gains and cost savings a must: a company’s broader digital transformation may depend on it!